Goldman Sachs Group Inc. announced Monday it will pay $2 billion to acquire Innovator Capital Management, a pioneer in defined-outcome exchange-traded funds, marking the Wall Street giant's latest move to expand its footprint in one of the fastest-growing segments of asset management.
The cash-and-equity deal, subject to performance targets and expected to close in the second quarter of 2026, will add Innovator's $28 billion in assets under supervision across 159 ETFs to Goldman's lineup. The acquisition will instantly vault Goldman Sachs Asset Management to more than $75 billion in total ETF assets across 215 strategies, positioning the firm among the top 10 active ETF providers globally.
"Active ETFs are dynamic, transformative, and have been one of the fastest-growing segments in today's public investment landscape," said Goldman CEO David Solomon. "By acquiring Innovator, Goldman Sachs will expand access to modern, world-class investment products for investor portfolios."
Wheaton, Illinois-based Innovator has emerged as a leader in defined-outcome ETFs, which use options-based strategies to limit investors' downside risk in exchange for capping upside potential. The structured products have gained traction among financial advisers seeking to protect client portfolios during periods of market volatility.
What Happened
The acquisition brings together complementary capabilities in a rapidly expanding market. Innovator manages 159 defined-outcome ETFs as of Sept. 30, offering strategies focused on income, targeted buffer protection and growth outcomes. The company pioneered Buffer ETFs, which provide downside protection while allowing participation in market gains up to a predetermined cap.
More than 60 Innovator employees, including co-founders Bruce Bond and John Southard, will join Goldman Sachs Asset Management's Third-Party Wealth and ETF teams following the transaction. The firm will maintain its existing investment management and service providers under Goldman's ownership.
"Goldman Sachs has a long history of discerning emerging trends and important directional shifts within the asset management industry," said Bond, Innovator's CEO. "We are excited to deliver world-class investment solutions to clients within the ETF framework and expand our business in this high-growth, sector-leading category."
The deal follows a series of strategic acquisitions by Goldman in the asset management space this year. In September, the bank announced a $1 billion investment in T. Rowe Price, and the following month acquired venture capital investor Industry Ventures to bolster its alternative investments platform.
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Why It Matters
The acquisition reflects the dramatic shift taking place in the ETF industry as investors increasingly favor actively managed strategies over passive index products. Global assets in actively managed ETFs have reached $1.6 trillion, rising at a 47% compound annual growth rate since 2020, according to Morningstar data cited by Goldman Sachs.
Defined-outcome ETFs represent one of the fastest-growing niches within active management. Research from Cerulli Associates projects these products could grow at a 29% to 35% compound annual rate over the next five years, potentially reaching more than $334 billion in assets by 2030 - significantly outpacing the broader ETF industry's expected 15% growth rate.
The products have caught the attention and, in some cases, ire of industry observers who debate their complexity and fee structures. However, their popularity among financial advisers has continued to surge as investors seek alternatives to traditional 60/40 stock-bond portfolios in an environment of elevated volatility and changing monetary policy.
For Goldman, the deal advances CEO David Solomon's strategy to pivot away from consumer banking toward more stable, fee-generating businesses in asset and wealth management. The bank has prioritized building out its investment management capabilities as it seeks to reduce reliance on more volatile trading revenues.
The transaction positions Goldman to compete more directly with established active ETF providers while leveraging Innovator's deep distribution relationships with financial advisers. The deal also provides Goldman with proven track records and operational infrastructure in a category where product innovation and adviser education remain critical to success.
Goldman Sachs was advised by its own Global Banking and Markets division as financial adviser, with legal counsel from Wachtell, Lipton, Rosen & Katz and Willkie Farr & Gallagher. Oppenheimer & Co. served as financial adviser to Innovator, with legal counsel from Vedder Price.
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